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Saturday, April 5, 2014

Robber Baron Etymology

As an article in the Economist explained a few weeks back, "In the Middle Ages the Rhine was Europe’s most important commercial waterway. Like many modern highways, it was a toll route. Toll points were meant to be approved by the Holy Roman Emperor, but local landowners often charged river traffic for passing through. These “robber barons”, as they became known, were a serious impediment to trade, and imperial forces had to take costly punitive action to remove them."

This reference sent me off, wandering the web, to figure when the "robber baron" terminology crossed over to refer to American businessmen who took advantage of their monopoly position to accumulate extraordinary personal wealth. The shift seems to have happened in the 1870s.

The Oxford English Dictionary cites the first usage for this meaning of "robber baron" in 1874, in the Congressional testimony of W.C. Flagg, president of the Illinois State Farmers' Association, before the Report of the Select Committee on Transportation -- Routes to the Seaboard, which is magically available on-line. Here's Flagg, orating on the subject of robber barons who owned railroads:

"England and America, you see, teach us the same lesson. Combination between
rival [railroad] lines has destroyed competition, except that occasional "cutting of rates" makes
fearful fluctuations, in which a few shippers gain, but for which the general public
must sooner or later pay. Our railways, practically, that is, are regulated not by competition, but by combination; by due of the parties in interest, and not by both. There-by you, the citizens of a democratic-republican country, are enabled to know how cruel,
relentless, and unscrupulous a thing is arbitrary power in the hands of a few. Regulation by combination means that the railroad managers are feudal lords, and that you
are their serfs. It means that every car-load of grain, or other produce of your fields
and shops, that passes over the New York Central shall pay heavy toll for right of
transit to Vanderbilt, the robber baron of our modern feudalism, who dominates that
way. Regulation by combination means that yon, the large manufacturer or shipper
or consignee at this point, shall truckle to railway officials for special favors, and skulk
and avoid the " farmers' movement," when yon believe it to be right, for fear you will
compromise your pecuniary interest. It means that you, the farmer, shall be compelled
to sell your corn below the cost of production, or that the consumer of the Atlantic
seaboard shall pay too much for his bread. It means despotism — paralyzing enterprise, rewarding subservience, suborning legislators, corrupting society, and trampling
on the rights of the citizen."

"Now what is one of the most frightful characteristics of our present mode of doing business? Is it not the building up of great fortunes out of colossal robberies? And the thing is done by a series of sensational addresses to the cupidity of the cheated. High interest notoriously goes with low security; but we have, sir, in this country, a class of rogues who may be called the aristocracy of rascaldom, and who get rich by dazzling and astonishing others into the hope of getting rich. They are the contrivers of enterprises which propose to develop the wealth of the country, but which commonly turn out to be little more than schemes to transfer wealth already realized from the pockets of the honest into those of the knavish. They are the financial footpads who lure simple people into stock corners, and then proceed to plunder them. They make money so rapidly, so easily, and in such a splendid sensational way, that they corrupt more persons by their example than they ruin by their knaveries. As compared with common rogues, they appear like Alexander or Caesar as compared with common thieves and cutthroats. As their wealth increases, our moral indignation at their method of acquiring it diminishes, and at last they steal so much that we come to look on their fortunes as conquests rather than burglaries. Indeed, their operations on Change vie
with those of military commanders in the field, and are recorded with similar admiring minuteness of detail. They are the great sensations of the world of trade, and have, therefore, more influence on the imaginations of young men just starting in business than the dull chronicles of the great movements of legitimate commerce. Now, sir, take the universal American desire to get rich, and combine it with the rapid, rascally way of getting rich now in vogue, and you will find you are breeding up a race of trading sharks and wolves, which will eventually devour us all. Honesty will go altogether out of fashion, and respectability be associated with defect of intellect. Why, the old
robber barons of the Middle Ages, who plundered sword in hand and lance in rest, were more honest than this new aristocracy of swindling millionnaires. Do you object that I am getting into a passion? Why, sir, I have purchased dearly enough the right to rail. Didn't I put my modest competence into copper? And to recover my losses in copper, didn't I go madly into petroleum? And didn't the small sum which petroleum was considerate enough to leave me disappear in that last little turn in Erie?"

What's interesting about this earlier quotation is that the reference to robber barons is still referring to the usage in the Middle Ages--and comparing them to "swindling millionaires" proffering get-rich schemes. At least judging by this example, the "robber baron" terminology was being compared with the businessmen of the time, but it wasn't yet being applied to monopolists.

I haven't tried to make a study of this, but the terminology of "The Robber Barons" was surely well-entrenched by the time Matthew Josephson wrote his 1934 book by that title, looking back at the second half of the 19th century. But the term didn't seem equally applicable to, say, Henry Ford or Thomas Watson as it did to Cornelius Vanderbilt and J.P. Morgan. I don't think I've ever heard "robber baron" serious applied to, say, Bill Gates or Warren Buffett.